Are you aware that if you owe money to the IRS they can garnish your wages? What a scary prospect. Of course the IRS can do a lot more than garnish your wages; under Internal Revenue Code section 6331, the IRS can levy upon wages, bank accounts, social security payments, accounts receivables, insurance proceeds, real property, and, in some cases, a personal residence.  And the IRS can get to your assets through you, your bank, your brokerage, your employer, etc.

Let’s take a closer look at the wage garnish process and discuss the appeal process if you are delinquent on your taxes.  

The Wage Garnishment Process

The IRS has statutory authority to garnish your wages to seize property to satisfy a tax liability without taking you or your employer to court. That’s right; they just need to issue a Tax Levy, and your employer must comply with the garnish of wages (or they will be in a lot of trouble).

To begin this levy process, the IRS needs to inform you with a Notice of Intent to Levy at least 30 days before the levy is to take place. They can do this by either personally hand delivering the notice, sending it through certified mail, or leaving it with your employer.  

How to Appeal a Wage Garnishment

As a taxpayer, you are entitled to one Collection Due Process hearing (CDP) with the Office of Appeals for each tax period (tax year) to which the levy applies. The 30 day period referenced above is important, as you will be given information (IRS Form 12153) that will allow you to request a hearing.

At this hearing, you may only appeal one of the following:

  • If you have paid all of your taxes owed prior to receiving the Notice of Intent to Levy
  • If the IRS sent the levy notice while you were in bankruptcy
  • If there is a procedural error in the assessment
  • If the Statue of Limitations expired before the levy was sent
  • If you want to discuss collection options
  • If you want to make a spousal defense: you need to apply and meet the qualifications of an innocent spouse

If you are not satisfied with the results from the CDP appeal hearing and believe you still have a case, you can contest the decision at the United States Tax Court or at a federal district court. You have 30 days to decide if you would like to appeal after receiving the CDP’s determination.

Another Way to Stop a Wage Garnish

You may be able to stop a levy against your wages if you submit an Offer In Compromise (OIC). Under this IRS program, you can settle any debt owed for less than the total amount through negotiations.

You will need to see if you qualify by checking out Form 656. Some of the qualifications include showing that you are incapable of paying the debt (Doubt of Collectability), demonstrate extenuating or special circumstances, or show that the tax liability is incorrect.



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Comments to How to Appeal the IRS Garnish of My Wages

  1. I had to deal with this last year. A few comments:

    The IRS is required to ATTEMPT to notify you. If for some reason they have the wrong address on file and the mail gets returned, they can proceed with the garnishment. This is what happened to me – despite the fact that I’ve lived in the same house for 6 years and filed taxes every year, the returns in question (from 2000) had my old PO Box address on them. When they attempted to notify me at the old PO Box address, obviously I didn’t get any of the communications. So they moved to a garnishment. I didn’t find out about it until my employer’s payroll department contacted me and said “your next check will be garnished”.

    If you are garnished, you will NOT be left a living wage. The IRS does not take into consideration your expenses before they initiate a garnishment. They have a standard chart based on your current W-4 info. For me, a single woman w/ no dependents and paid every 2 weeks, I was left with $316 per paycheck. That didn’t even cover my house payment.

    If you get a notice of garnishment (or of past taxes or of anything for that matter) don’t attempt do deal with it yourself and DON’T fall prey to those legal services that will charge you $$$$ to “handle” the situation. Immediately contact the IRS Consumer Advocate Service. http://www.irs.gov/advocate/article/0,,id=212313,00.html

    You can also file the appropriately named Form 911 which is a request for advocate service assistance. http://www.irs.gov/pub/irs-pdf/f911.pdf

    You’ll be assigned an advocate who will help you work through the situation. That person has access to all your IRS files so he or she can tell you exactly what you’re dealing with .. and then your advocate will take your counter offers and proposals back to the IRS to negotiate a settlement or a payment plan.

    Don’t bury your head in the sand and hope it’ll go away. It won’t. But don’t be frightened either. My advocate was the nicest, most helpful, most reassuring person I’ve ever dealt with. She helped me work through the issues and get set up on a reasonable payment plan.

    kh

    • I just stumbled upon you post. Thank you so much for the reassurance. I am terrified. I received notice today from my employer and have spent all day trying to reach my IRS officer by phone and event went to the office. I had no luck. I found the advocate information this evening and starting filling out the form.

      Marie

    • I have a store credit card debt they are already garnishing my wages every pay check ( already pay more than 50 % so wonder if the IRS will take my tax return money even when they are getting money already ? thank you

      David


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